Please give me one piece of advice that you wish you knew when you were 20!

Cash-Cow_3

tibbles209 wrote: »

I'm 20 years old and as of yet don't have any debt, however lots of my friends are sinking into debt and it feels almost inevitable that I will too So if you could speak to your 20 year old self and give them 1 piece of advice that you wish you knew then to help them stay out of debt, what would it be?

Thought it might be a good idea to try and head debt off before it happens. Thanks in advance for the tips!




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The fact you're on this site is a great start on a debt free life. I would suggest your friends haven't been on here yet.

My advice is, if what you're buying you need to borrow money to buy that item then you probably can't afford it. Don't buy anything on interest (apart from a house).

Cars: expensive items. More so when you are young. Do you need one. Anyone living within 4 miles of work probably doesn't need a car to get to work. Think what you can save by not having a car. If you are worried you might need a car occasionally, then hire one. Lets face it £1000 you pay in insurance pays for an awful lot of car hire and taxi fares.

Holidays: my only debt I have ever had was basically a holiday to Florida. I was 20 !!!!!!. It took me years to pay it off and regretted it. It taught me a lesson though. And as it goes it wasn't even a great holiday either - much cheaper holidays camping in this country have been far better.

Clothes: I know youngsters like the designer gear and I understand that. But they come at a price. So if buying expensive clothes try and pick those that at least might last more than a season.

Pension: boring I know but one thing I did when I was 18 was start a pension. I didn't put a lot in to start with but gradually increased it. Just consider it a monthly 'bill' after a while you won't notice it coming out each month.

molit

Mine would be

Pay your rent/mortgage first, pay your bills next, then buy food, then buy anything else you need after that..

Oh, and never use the credit facility on credit cards, just use them for security and cashback

sparklymessygirl

It sounds negative but you need to plan for life not turning out as you have planned. It just takes a couple of things - e.g. a career you have worked so hard for not ending up what you want to do, not being able to have the baby you have wanted and having to spend thousands on fertility treatment....maybe some illness befalling you in the future.....(sorry , I know this sounds grim)...but all these situations can be mitigated by being careful during the good and easy times. Always save as much as you can. In later years you may regret the money spent on gadgets, clothes, jewelery etc as these are just temporary adornments and may eat into your future security. Try not to compare your life to anyone elses. Get into minimalism, lol!

spethmeister

If & when you have kids, don't buckle under pressure to always get them everything! How much they need compared to how much they end up with... I ould have saved a fortune by being more sensible / controlled about what I buy for my girls. I've definitely improved now though - at last!! (Only 8 years later...!)

canidothis

Because finances are very rarely discussed between friends I didnt realise that people would budget and keep an eye on their finances, so I didnt bother thinking that nobody else did!! Keeping my eye off the ball has got me in a right mess!

I wish I had known how to set a budget and how to use spreadsheets. Now 28 years after turning 20:eek: I have created a fab spreadsheet and over the last couple of months I have developed it so that it doesnt take that much work (however I love it so much I look at it every day )

It feels so good to be able to log into online banking knowing what the balance is and not (as I used to do) keep one eye shut so that I couldnt see the bottom line. Stay aware, set and keep to your budgets it feels sooooo good :rotfl:

GingerFurball_2

The one thing I wish I knew 6 years ago was Martin's 'good debt, bad debt' mantra.

Having never really learned about debt I made the mistake of lumping all debt together instead of working out that using £200 of an interest free overdraft instead of a credit card is a smarter way of using credit.

I also wish I'd properly clues myself up on credit cards before running up a debt of £3k on it. I'd like to think that if I'd understood just how much paying off only the minimum every month was going to cost me that I would have been a lot less cavalier in running up debt on my card.

Despite all the money I've spent repaying credit card debt I wouldn't advise people against getting them. The critical thing with credit cards is that you use them properly. Do that, and they're extremely useful things to have.

Foolish_spendthrift

Well done for recognising so young what it's taken some of us a couple of decades to accept.

GOLDEN RULE NUMBER 1: Do not use credit cards. Do not allow them to lure you into their realm. They are overseen by cunning magicians who can conjure up small print and cast misery over your life. (Okay, so that's how I view the little ******** - it helps me!)
GRN2: Set up a savings plan to put aside a small sum each month, but put it into an account you can't easily withdraw from. It's amazing how quickly it will add up and as long as it's 'affordable' to save, you won't miss it. It could be the sort of money your mates fritter away on a few nights out each month, but could help you realise some of your bigger life ambitions.
GRN3: Have an 'easy access' savings account for hiving off any spare cash left each month - if you leave it in your main account, you may get used to spending it on things you don't really need. Again, this will soon add up and will be your safety net.
GRN4: Do not lend money to your mates. That fiver becomes a tenner, becomes twenty, and before you know it you're stressing over how to broach the sensitive subject of repayment.
GRN5: HAVE SOME FUN: draw up a sensible budget listing essential outgoings, some saving - if you can afford it - but some 'spends' as well. Make use of the money saving offers & restaurant deals, cashback sites and you'll set some good habits for life that your mates will be envious of when reality hits them.
GRN6: Financial security is priceless, but that can be achieved on relatively modest wages as well as megabucks, and a quick trawl through this site will show you what inspires others and keeps them on track.

Good luck.

thechippy

I would not have married the first wife...........:D

Magic_Sister

If your gut feeling is that you're being lied to, where money or anything is concerned, don't let love cloud your judgement. Get it sorted straight away!

LookingAhead

Gosh I haven't logged into MSE for a long long time but felt compelled to after finding your thread. Hats off to you for asking & recognising what could be in store for you if you follow your friend's leads.

First thing that comes to my mind is: you've posted a thread on a forum which is inundated with threads & posts from people in shed loads of horrendous debt....and although I don't have the stats I'm willing to place a virtual bet that most of it was accumulated through credit card & overdraft spending on new 'stuff' and good times. Ask yourself this question....if you take out credit cards & use an overdraft,what would make you so different that you could avoid the same scenario in a matter of months if not years? That's not an aggressive question...just an honest one you need to ask yourself because trust me, you don't want to join the debt club.

I took out my first credit card at 18 thinking I would only use it for the odd thing & would pay it off straight away. 21 years later I finally got out of debt and I dread to think how much debt I accumulated in that time. I honestly don't know but I must have spent in excess of £30k on mostly nothing of note.

So my advice to you would be:

* Save every month....put savings away (as much as you can realistically afford) before you do anything else.
* Pay your parents a respectable amount
* Split the rest of your money into chunks i.e. going out clothes public transport birthdays/Christmas etc and when it's gone it's gone. Be creative in how you make your money last.
* Replace the word credit with debt (that one's from Martin and it's a good one!)
* Never lend or borrow
* Research everything you want to purchase, can you get it cheaper somewhere else? Can you get tickets cheaper somewhere if you book in advance? Be savvy about the money you spend.
* Last but not least.....if you can't pay cash for it, save till you can (if you still want it)

I do think learning to drive is a life skill but if you do learn to drive, buy a (small) car with cash and do your homework on reliable cars/cars that are cheap to fix if they go wrong. Speaking from experience: Fiat Pandas are great! :-)

But if you live somewhere with great public transport, use it for as long as possible....cars cost money even sitting on the bl**dy driveway!

I really & truly wish you all the best in staying out of debt. You do have to have fun in your twenties but just keep control, stick to a budgeted amount and you can really enjoy the fruits of your fiscal savings labours in your thirties, forties & beyond. Good luck!

xx